After years of setbacks and disarray, Al Qaeda's Yemen branch appears to be attempting a comeback in southern areas – some under the control of militias nominally allied to the government and with links to the Muslim Brotherhood.
Al Qaeda in the Arabian Peninsula claimed responsibility for a spate of recent attacks.
On March 18, eight soldiers and four civilians died in a raid on a checkpoint operated by the Security Belt Forces in Ahwar district of Abyan province.
Three days later, Aqap claimed an attack on a military site controlled by Houthi rebels in the Mukayras district of Bayda province.
On April 6, Aqap claimed responsibility for a rocket attack on a military base in the Balhaf area of Shabwa used by Arab Coalition forces supporting the government.
The attacks indicate a resurgence for Aqap, particularly in Shabwa and Abyan, which, with Hadramawt province, were its former strongholds.
The terrorist group has its roots in Muslim Brotherhood followers in northern Yemen who were sent to Afghanistan to fight the Soviets in the eighties.
Those fighters returned to Yemen after the unification of the north and south in 1990 and formed a local branch of Al Qaeda in the south that attacked American interests, including the bombing of the USS Cole in Aden in October 2000 that killed 17 American sailors.
The group ramped up its activities after Yemenis rose up against president Ali Abdullah Saleh in 2011, when it seized control of Abyan.
It widened its reach after civil war broke out between the Iran-backed Houthi rebels and the government of President Abdrabu Mansur Hadi in late 2014.
The Arab Coalition helped pro-government forces to inflict fatal blows to Al Qaeda havens in southern Yemen, starting with the liberation of the port city of Mukalla in Hadramawt in April 2016 after a year of Aqap occupation.
Operations against Al Qaeda by coalition-trained Elite Forces in Shabwa and Security Belt Forces in Abyan were halted after fighting broke out between pro-government forces and those supporting the separatist Southern Transitional Council in August 2019.
Militias comprising mainly Muslim Brotherhood followers then seized control of these areas in breach of a coalition-sponsored ceasefire.
Members of Aqap have been returning to former strongholds in Shabwa and Abyan since 2019, local leaders and military officials said.
Sheikh Salem Al Othali, a tribal leader from Lawder district in east Abyan, said dozens of Al Qaeda militants returned to Abyan recently from neighbouring Bayda province. They began regrouping and recruiting in their former strongholds of Moudyah and Al Mahfed districts, he said.
"The Security Belt Forces in Abyan and the Elite Forces in Shabwa, working with the tribes, inflicted fatal blows to Al Qaeda and successfully secured 90 per cent of Abyan and Shabwa," Sheikh Al Othali told The National.
"Unfortunately, these forces could not carry on the battle to eliminate Al Qaeda and the other terror groups in Abyan and Shabwa because the two provinces [are] under the control of the pro-Muslim Brotherhood militia, which advanced from Marib and Jawf provinces to support the government forces which clashed with the pro-STC forces in August 2019," he said.
"Since then, Al Qaeda militants returned to former pockets and started launching retaliatory attacks targeting security personnel, especially the Security Belt Forces and tribal leaders who fought them."
Capt Salah Al Yousfi, spokesman for the Security Belt Forces, confirmed the Al Qaeda presence in some eastern areas of Abyan.
"Dozens of Al Qaeda militants came back to Abyan in the last 10 months. They have been regrouping in Wadi Omaran in Moudyah district," Capt Al Yousfi said.
"Some of them were released from prisons in the Houthi-held province of Bayda after a prisoner swap deal between the group and the rebels."
Al Qaeda has been attacking soldiers from the Elite Forces since its return to Shabwa in August 2019, said Ahmed Al Hur, a resident of Ataq, the main city in the province.
"Six soldiers of the Elite Forces were assassinated by Al Qaeda since the Muslim Brotherhood militia took control over the province in August 2019," Mr Al Hur told The National.
The rocket strikes on the coalition base in Balhaf was the first attack officially claimed by Aqap in Shabwa since September 2018, according to Dr Elisabeth Kendall, Yemen expert at the University of Oxford.
"This attack adds to the evidence that Al Qaeda is regrouping in the south. It may be that Al Qaeda elements from Bayda and Marib have moved south to join up with the group's fragments in former strongholds like Shabwa and Abyan," Ms Kendall told The National.
It may also be that splinters of Al Qaeda that were absorbed by more formal militias are again asserting their Al Qaeda identity, she said.
"Al Qaeda has been severely degraded in Yemen since it was ousted from Mukalla precisely five years ago. But experience teaches us that extremism is never truly defeated, only managed. It will be easiest for it to resurge in areas where its roots are deepest, like Abyan, Shabwah and Hadramawt."
Irina Tsukerman, a human rights lawyer and security analyst, attributed Al Qaeda’s resurgence to the presence of the Muslim Brotherhood militia in these provinces.
"Al Qaeda has been making a comeback in Yemen since 2019, particularly in the areas controlled by or with a significant presence of the Muslim Brotherhood group in Yemen and the proliferation of the group affiliates in the pro-Yemen government forces," Ms Tsukerman told The National.
"Muslim Brotherhood political factions, despite occasional differences in methods from Al Qaeda, in reality share the same ideology, long-term vision, and even membership," Ms Tsukerman said.
"The [Coalition] forces were instrumental in working with the US and others in the past in dismantling Al Qaeda strongholds in those areas. However, since these forces mostly withdrew, Al Qaeda are taking advantage of the situation to return."
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
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